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Ditto for most of the other differences between startups and what passes for productivity in big companies And yet conventional ideas of professionalism have such an iron grip on our minds that even startup founders are affected by them In our startup, when outsiders came to visit, we tried hard to seem professional We d clean up our offices, wear better clothes, and try to arrange a lot of people to be there during conventional office hours In fact, programming didn t get done by well-dressed people at clean desks during office hours It got done by badly dressed people (I was notorious for programming wearing just a towel) in offices strewn with junk at 2:00 in the morning But no visitor would understand that Not even investors, who are supposed to be able to recognize real productivity when they see it Even we were affected by the conventional wisdom.

We thought of ourselves as impostors, succeeding despite being totally unprofessional It was as if we d created a Formula 1 car but felt sheepish because it didn t look like a car was supposed to look In the car world, there are at least some people who know that a highperformance car looks like a Formula 1 racecar, not a sedan with giant rims and a fake spoiler bolted to the trunk Why not in business Probably because startups are so small The really dramatic growth happens when a startup only has three or four people, so only three or four people see that, whereas tens of thousands see business as it s practiced by Boeing or Philip Morris This book can help fix that problem, by showing everyone what, till now, only a handful people got to see: what happens in the first year of a startup.

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This is what real productivity looks like This is the Formula 1 racecar It looks weird, but it goes fast Of course, big companies won t be able to do everything these startups do In big companies, there s always going to be more politics and less scope for individual decisions But seeing what startups are really like will at least show other organizations what to aim for The time may soon be coming when instead of startups trying to seem more corporate, corporations will try to seem more like startups That would be a good thing Paul Graham Cofounder, Viaweb.

If your users need to control access to the data by assigning user names and passwords to those authorized to run the program, then you have to decide if you want a simple user name/password access or if you want to grant some users the right to do anything some users the right to enter, edit, and report data only, and some users the right only to see data. In other words, you may want to build in several levels of access:

Livingston: Had you always planned for Hotmail to be free for users Bhatia: Yes. Livingston: How did you convince people you could make money from targeted advertising That was so novel at the time. Bhatia: It was novel, but at the same time it wasn t novel, because Yahoo had

gotten funding (and later went public) on that basis. Their whole concept was to grow by advertising, even though it was a directory, because people would pay for advertising. Our whole idea was that, if page impressions are a commodity that can be sold, can be monetized, then we would generate far greater page impression than they were able to because you interact a lot more when you do email. You click on something and a page comes up and you click on something and another page comes up. So we were thinking of the number of pages and the number of page impressions as the monetizable quantity. In our estimate, we

believed we would overtake Yahoo in the number of page impressions that we would deliver, which was what Yahoo was touting. What has happened in the last 10 years is that advertising has grown even more. It s not just page impressions, but the number of click-throughs. The most monetizable part of advertising (at least online advertising today) is the click-through to another advertiser, which is search. When people search, they re most likely to click through because that s when they re looking for something. Google has proven remarkably well that click-through is a monetizable quantity more than page impressions. You can have 100 page impressions and that has some value, but the click-through has far greater value because that s how advertisers measure, Is this advertising working for us or not

1. Administrator: Users at this level get to do everything. 2. Read/Write: These users get to enter and edit data, but they can t do

Livingston: Did you have a hard time signing up advertisers at first Bhatia: It takes a long time before you can break through to an advertiser and

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